Evan Davis on... customer satisfaction

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There’s a rule in business about customer satisfaction. Customer satisfaction depends on the quality of service they get. But it also depends on the expectations they start with, and the rule goes something like satisfaction equals service quality minus expectations. You can have disappointed customers with wonderful products if the product still isn’t quite as good as was expected, so managing expectations is a key function of business, just as delivering good service is a key function of business.

Now here’s a problem, a really ubiquitous problem in business. It comes up in life, it particularly comes up in politics, and it comes around managing expectations. A lot of the time in life, we’re trying to sell ourselves, we’re trying to raise people’s expectations of us in order that they’ll pick us rather than one of the other competitors whom we’re fighting against. At the same time, if you manage expectations up by selling yourself, you then face the likelihood that you will disappoint people thereafter because you’ll fail to live up to the expectations that you’ve built up.

Now, as a theory, the political process, this has a lot of appeal doesn’t it, that essentially politicians are constantly trying to sell themselves to us by overrating themselves and hyping up their own ability to deliver things, and then what happens is, having won the election, they can never live up to their promises and we always end up sceptical, always end up complaining about politicians and their promises. But it applies ubiquitously, it applies in business too.

Now, I’m not sure there’s a solution to this dilemma, overselling yourself to get the deal, underdelivering the service because you can’t live up to the expectations you’ve set and established. Perhaps the solution is the long term reputation. If you’re in it for once, and you’re only in it playing it for the short-term, then you just sell yourself as high as you possibly can and don’t worry about the fact that you leave everybody disappointed.

If you’re in it for the long term, you probably can’t afford to oversell yourself, you just have to deliver it as it is, and if that means losing a few contracts initially, so be it, tell them as it is, take the penalty in the fact that you won’t win the business, but then you develop a reputation for delivering what you promised, and in the long term that probably pays some sorts of dividends. It’s like an investment; you’re investing in your reputation, sacrificing in the short term and taking the benefit in the long term. That’s the solution, the only solution I can think of.

That’s my view. You can join the debate with the Open University.